August 2, 2012

I don’t quite understand why President Obama has to claim that General Motors is a great success story (“back on top … [b]ecause America always wins when the playing field is level …” etc.). Why couldn’t he say: “We gave GM and its employees another chance, at a time when our economy was fragile and couldn’t absorb a massive shutdown. Now it’s up to them. They have the tools they need. They may make it–I hope they do. They may not. We aren’t going to bail them out again.”

"Why couldn’t he say: “We gave GM and its employees another chance, at a time when our economy was fragile and couldn’t absorb a massive shutdown. Now it’s up to them. They have the tools they need. They may make it–I hope they do. They may not. We aren’t going to bail them out again.”"

Because that's not the way he's wired. You can see it in so many of his pronouncements. He did not mis-speak when he said "You did not build that". He truly does not believe in capitalism.

It was my first thought, and it is a shame that it was. My family has a long history of loyalty to GM because we have had several GM car dealerships among our relatives. After the bailout and the political posturing that accompanied it I vowed to never buy another GM car. I suspect I'm not the only person to do that. We're about to buy a new car and it's a foreign car built in the United States by non-union labor. The unions and the bail-out have a lot to do with our decision.

GM was gaming its cost accounting practices before the bailout, and it resumed those practices after the bailout in order to claim those early profits. The company was and continues to be built on a house of cards.

My first thought was that it was a shame that the bankruptsy and restructuring was screwed up by a government intervention driven by politics. A lot of jobs and money were/will be lost and another old American company will go down the drain. The shear incompetence of it all breaks my heart.

"Mickey - Why couldn’t he say... We aren’t going to bail them out again.”

Uh, because they are going to bail them out again, at 750k of bailout money per 70k job per year.

"Was your first thought what this means for Obama? If so, isn't that crazy?"

No, my first thought is how much better off they'd be if they went through normal bankruptcy and were able to renegotiate the ruinious union and pension contracts they operate under. But Obama couldn't allow that, because Democratic interest grroups wouldn't have been insulated from loss.

I didn't think of Obama at all. Instead, I thought that I guess we weren't the only ones who decided to stop buying GM cars after it was taken over by the unions/govt. We used to buy GM vehicles (and still own 2) but we bought a Toyota after the unions/govt took over GM because GM's quality wasn't great before the takeover and we thought it would only get worse after the takeover.

The optimistic reporting on GM's finances so far has been dependent on a lot of Government-style accounting domestically, and GM's successes in China, and we have not been told much about where those cars are built or by whom.

Thank goodness Obama took billions of taxpayer money to pay off his auto union cronies, otherwise that money might have been put to good use. And we all know putting money to good use is to democrats what garlic is to vampires.

First, GM won't be paying any US taxes for a long, long time because their losses were preserved in another element of the sweetheart deal given by Choom to the GM + unions.

Secondly, a firm like GM would have "survived" bankruptcy many others do especially if they have viable businesses and just need to trim some debt and pension exposures. It happens frequently in America. They would have emerged stronger than they are now.

In addition to their current problems, they're also busy setting up themselves and the country for future losses. Since the subprime mortgage crisis worked so well, GM now sells the vast majority of its cars to subprime buyers: http://pjmedia.com/instapundit/?s=gm+subprime

I started to post something, and then decided against it. Just get these crooks outta DC. Nov. can't get here fast enough. I look forward to Zero, and Moochie committing suicide when they find out how despised they are by the country.

Why couldn’t he say: “We gave GM and its employees another chance, at a time when our economy was fragile and couldn’t absorb a massive shutdown

This is an easy question. For the president, it's not enough to be a helping hand, it has to be a success. This is a template of what the president wants for all of business. It completely fits with his "you didn't build that" belief.

But isn't a perfectly legitimate thought? Especially since Obama and Co want to make Mitt's days at Bain an issue (i.e. taking bad assets and trying to turn them around)? It's a perfectly reasonable line of thinking. The President wants you to think of GM as a success, HIS success (that he took a bad asset and turned it around). So all counters to that point (and there will be many more) have to put a dent in this 'success' story.

I look forward to Zero, and Moochie committing suicide when they find out how despised they are by the country

Golly.

Wouldn't you rather see Zero live through many subsequent administrations that all did better than his, moving public opinion of him steadily lower, and watch the Democrats blame his personal flaws (rather than the sacred Party line) for the crushing defeat, and know Barry not only sees all of it but gets daily reminders from Michelle about how much higher her standard of living could have been if he'd beaten that white stiff?

They're still using taxpayer money to boost sales. This is criminal. If a Republican administration was pulling this stuff, the impeachment hearings and criminal charges would be flying faster than Air Force One to fund raising dinners.

I had to rent a 2012 Chevy Impala last week while my Kia Optima was in the shop (somebody dinged the rear bumper). Miserable car -- underpowered, uncomfortable, and without many features, like sattelite radio, Bluetooth, and GPS, that get crammed into Korean-branded cars at a lower price. Just today, I went to the Chevy web site and tried to price out Impalas, but couldn't configure a nice one at anywhere near the price I paid for my car.

Chevy can't make a car that competes with Kia on price. Even Chrysler has cars that would eat Chevy's lunch. Exactly what success are we supposed to be celebrating?

Miserable car -- underpoweredThen either it was in disrepair or it was not a 2012, which has 300 horsepower and a 6 speed transaxle. Previous years had ~225, which did fine for a family sedan. They sell at huge discounts, and a totally new version comes out in 6 months. Sure it was an Impala?

GM is actually making a decent profit in North America in a depressed market, but they're losing even more than last year in Europe, where it's extremely expensive to layoff workers and they have considerable overcapacity.

The story is that Obama and others distorted the bankruptcy system to give GM a favored status. However, you can't save a company that is a loser. If you pump money into a money-losing operation, it will keep losing money; it's just that it will have more money to lose.

Obama's ads running right now in FL are suggesting that Romney indicated the automakers "should just go bankrupt" in 2008. I assume it is an accurate quote, and, in fact, if it is, it's one which pays compliments to Romney's business insight.

Taking you back to those wonderful days of yesteryear, i.e., September 2008, when the heads of the "Big 3" went to Washington to persuade Congress that bankruptcy (in the case of GM and Chrysler) was not inevitable and had to be avoided at all costs, when the street knew different. Rick Waggoner, then GM CEO, indicated that they couldn't file bankruptcy, since no one would buy a car from a firm in bankruptcy. Pretty false assumption then, well proven as false now. But he maintained that argument from September 2008 until May 2009, when GM filed Chapter 11.

What would have happened if GM had filed in say, November 2008 instead of May 2009? First off, the $17.8B in TARP funds that the Bush administration distributed in December of 2008 wouldn't be toast. Second, the Obama Administration wouldn't have been able to broker the ultimate bankruptcy case for the benefit of the UAW.

So, what Obama offers in the ad is hardly a point in favor of his candidacy.

"Was your first thought what this means for Obama? If so, isn't that crazy?"

Only to the extent that you consider socialism in America crazy.

When the British Labour government nationalized British Leyland in 1975, the English voters attributed the failures of the automaker and the other nationalized companies to their government owners when Maggie Thatcher ran for Prime Minister in 1979.

We're about to buy a new car and it's a foreign car built in the United States by non-union labor.

One of the ironies of our auto industry woes in the US is that if you look at the Toyota family in Japan, their workforce is mostly unionised, both in the factories and in the offices. And the same is true of their suppliers. In Korea, Hyundai and Kia factories are unionised too (in fact, I think they're gearing up for a strike right now, or were a few weeks ago). I don't know about the European makers, but I'd be shocked if they weren't unionised.

It's not unions that make the US companies uncompetitive. It's specifically the UAW, and the perverse union culture that it has fostered.

"Balfegor said... It's not unions that make the US companies uncompetitive. It's specifically the UAW, and the perverse union culture that it has fostered."

I disagree. specifically but agree they work better elsewhere. It's the history of animosity and intentional antagonism throughout American union culture. The UAW might be the biggest and worst offender, but it's hardly the only.

There's something about Americans, (envy?, a need to feel superior to someone?), that makes the union setup particularly toxic.

No, my first thought was that I was glad I own a Dodge and not a GM car. Although come to think of it, if I had owned a Saturn, Hummer (not bloody likely!), Pontiac or Saturn then I'd already be screwed anyway, right?

As a corporation GM has managed to screw up most of its own brands, not to mention Isuzu, Saab, and now, it would appear, Opel. Opels and Saabs used to be good cars (don't know about Isuzu since I never owned one or had a friend who owned one).

Doesn't look as though GM was saved; it merely had its day of reckoning postponed (and not by much).

General Motors, Susan G. Komen, and now Chik-Fil-A. Thank God the companies I've worked for have had leadership smart enough to avoid the idiotic trend of associating brands with ideologies or parties.